Will Cloud Software Drive Salesforce’s Growth In 2018?

by Trefis Team
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Salesforce.com (NYSE: CRM) published its Quarter 4 and fiscal year 2019 (ended January 2019) results on March 4, 2019 and had an investor call on the same day. The company beat consensus for both revenues and earnings. Total revenues were $13.3 billion, up by 26.8% year on year (YOY). The Non-GAAP earnings were reported as $2.75, up by more than 40% YOY. The company has more than doubled their revenue from $5.4 billion to $13.3 billion in the last 5 years.

We currently have a $174 price estimate for the company. View our interactive dashboard – Our Outlook for Salesforce.com for FY 2019 and modify the key assumptions to arrive at a price estimate of your own. In addition, here is more Information Technology Data.

Operating cash flow for the company increased 24% YOY and was reported as $3.4 billion. Unearned revenue and remaining performance obligation were also up by 22% and 25%, respectively, which shows the future revenue generation capacity of the company. The operating margin decreased slightly by 28 basis points. The highest growth came from Salesforce Platform (Cloud Software) as it increased by 49% YOY to record $2.9 billion in revenues.

The company’s Einstein AI is now delivering more than 6 billion predictions every day. The company has created Trailhead, a personal learning cloud that will help empower a person without regard to their background so that they can learn and demand skills for free. The company currently has 1.2 million learners on Trailhead and are expecting to add many more soon. The acquisition of Mulesoft one year back has been quite successful as it has propelled Salesforce to be the number one integration platform in the world.

The company has set forth a long-term revenue goal of $26 billion to $28 billion in Fiscal year 2023. For the next fiscal year, the company raised its guidance by $50 million to $15.95 to $16.05 billion in revenue with earnings around $2.74-$2.76, in line with the previous year.

Salesforce.com has extended its strategic alliance with Google to deepen the integration between the company’s Marketing Cloud and Google Analytics 360. The initiative has been witnessing positive feedback from customers. Further, Salesforce Commerce Cloud continues to be the fastest growing enterprise commerce solution and is delivering solid results. In the fiscal year 2018 (ended January 2019) the company acquired CloudCraze, the leader in B2B commerce, to offer a single platform that can be used for both B2B and B2C experiences by Salesforce’s clients. All these initiatives are likely to boost the company’s top-line as well as valuation in the near term.



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